W-2, 1099, and Schedule C: what is the difference?

Updated: 2026

These forms may look similar to a client, but they represent different types of income and require different tax treatment.

W-2

A W-2 usually reports employee wages and taxes withheld.

It is important to check the name, SSN, address, wages, federal withholding, state wages, and state withholding.

A 1099 may report different types of income: contractor income, interest, dividends, investment sales, platform payments, and other items.

Not all 1099 forms are handled the same way, so the exact type of form matters.

Schedule C is used for self-employed / sole proprietor income and expenses.

The preparation depends not only on gross income, but also on supported business expenses by category.

W-2, different types of 1099, and Schedule C can affect tax, credits, withholding, self-employment tax, and state returns differently.

If you have several income types, it is better to review all forms together so the return is consistent.